Bad Economic News Drives Stock Market Gains

The Dow Jones Industrial Average gained 150 points on Wednesday as investors interpreted bad economic news as good news for the Federal Reserve to continue buying bonds. That was also good news for Mortgage Industry Equity Composite stocks as 13 of the 17 members closed higher than they did on Tuesday.

Meanwhile, the introduction of the Corker-Warner government-sponsored enterprises reform bill ate into the stock prices of Fannie Mae and Freddie Mac, as both lost approximately 25% off their respective previous closing prices.

As for the MIEC, PennyMac was the biggest gainer on a percentage basis, up 3.87%. KB Home gained 2.47%, while Hudson City Bancorp was up 2.16%.

The four losing stocks were OceanFirst Financial, down 1.22%; Home Loan Servicing Solutions, down 1.13%; Redwood Trust, down 0.84%; and Bank of America, down 0.26%.

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